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Best Credit Cards for Beginners for August 2020

Best Credit Cards for Beginners for August 2020

*Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any credit card issuer. This site may be compensated through a credit card issuer partnership.

This article was last updated Jul 31, 2020. Terms and conditions may have changed. For the most accurate information, please consult the issuer website.

When it comes to building credit, the earlier the better — and choosing the right starter credit card will help you establish a good credit score. Credit cards for beginners often have few bells and whistles, but when used responsibly, you can upgrade to a better card down the line.

Deciding which starter credit card is the best fit for you can be challenging. Since everyone has a different credit profile and different spending habits, there isn’t a single “best” beginner credit card. However, with various options to choose from, there’s something for everyone.

Based on our research of cards available through CompareCards, as well as top cards offered by major issuers, we put together a list of top cards for someone new to credit.

Know your credit score

Before you choose a card, you need to ask yourself a few questions that can help narrow down your choices — the first of which is to know “what is my credit score?” or “do I even have one?”

By knowing where you stand, you’ll have a better idea of which cards you may qualify for. If you have a bank account, credit card or loan through American Express, Bank of America, Barclays, Chase, Citibank, Discover, PNC Bank or Wells Fargo, for example, you should be able to access your credit score through their online portal. Here is a list of financial institutions that belong to the FICO Score Open Access Program.

You can also check your score for free by just answering a few questions to confirm your identity at CompareCards through its parent company LendingTree. And at Discover.com, you can access your FICO Score for free online with Discover Scorecard, even if you aren’t a Discover customer.

Even if you’ve never had a credit card before, you can still have a credit history if you have had other credit products, such as student or car loans.

However, if you don’t have a credit score, that doesn’t mean you can’t qualify for a credit card. Secured cards are great starter cards that can help you build a credit history from scratch. They require a deposit, often starting at $200, which serves as your credit line, and once your scores improve from responsible usage, you may be able to apply for an unsecured card.

If you’re a student, there are student cards made just for you — and some may even reward you for maintaining good grades.

Read: Best Student Credit Cards

Are you ready to take on the responsibility of credit?

Know that you need to be at least 18 years old and have a steady source of income to list on the card application to be approved for a credit card. Once approved for your first card and to build up a solid credit score, here are the most important things you should do:

  • Don’t max out your credit limit. That means if you’re given a $500 credit limit, don’t charge more than 30% ($150) to your card in any given month.
  • Pay on time every time. Late payments will really knock down your credit score and stay on your credit reports for up to seven years, but their impact will fade over time with responsible usage. If you have difficulty keeping track of payment due dates, set up autopay either through your bank or your card’s online account.
  • Don’t carry a balance. To avoid racking up debt, charge only what you know you’ll be able to pay off when the bill comes due. If your balance becomes too big to pay off, stop using the card until you have your debt paid off.

Read: 5 Things to Know Before Opening Your First Credit Card

Best secured cards for no credit history

A secured card is a good place to start if you’re just beginning your credit journey. It can provide you the basis to establish a solid credit history. They can be used just like unsecured cards — the only difference is that you’re required to make a security deposit that will serve as your credit line. This deposit is refundable if you pay off your balance in full and close your account or if you’re upgraded to an unsecured card.

Here are two top secured cards for those new to credit.

Discover it® Secured

  • 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. 1% unlimited cash back on all other purchases - automatically

  • Credit line will equal your security deposit of $200 or more*

  • No annual fee, no late fee on your first late payment. No penalty APR*

Highlights
  • No Annual Fee, earn cash back, and build your credit with responsible use.
  • It's a real credit card. You can build a credit history with the three major credit bureaus. Generally, debit and prepaid cards can't help you build a credit history.
  • Establish your credit line by providing a refundable security deposit of at least $200 after being approved. Bank information must be provided when submitting your deposit.
  • Automatic reviews starting at 8 months to see if we can transition you to an unsecured line of credit and return your deposit.
  • Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score
  • INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • See Rates & Fees

See additional details for Discover it® Secured

More Info

The Discover it® Secured is an all-around great secured card with rewards, a $0 annual fee and typical $200 security deposit. It’s rare to find a secured card with a rewards program, but this card provides 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. 1% unlimited cash back on all other purchases - automatically. After your account has been open for eight months, Discover will automatically begin reviewing your account to see if you qualify for an unsecured card. If approved, you can receive your deposit back minus any fees or balance owed.

Capital One® Secured Mastercard®

If you’d like to see if you can qualify for a secured card that may require a smaller security deposit, the Capital One® Secured Mastercard® provides the chance to qualify for a lower $49 or $99 deposit. Just know, there’s no guarantee you’ll qualify for a lower deposit, in which case you’ll need to fork over $200. Regardless of the required minimum deposit, you’ll receive a $200 credit limit. This card doesn’t offer rewards, but does have a $0 annual fee and allows you to receive a higher credit limit after you make your first five monthly payments on time.

Best credit card for limited or no credit history

Petal® Visa® Credit Card

If you have a very limited credit history, or don’t have a credit score at all, the Petal® Visa® Credit Card may be a good unsecured card to start out with. There is no credit score required to qualify for the card, as the issuer will analyze bank statements and other personal financial data to determine if you’re eligible. Plus, the card has a $0 annual fee, no late payment fees and a foreign transaction fee of none.

The Petal® Visa® Credit Card also offers a cashback rate of 1% right away, then 1.25% after six on-time monthly payments and 1.5% after a year on timely payments.

And the Petal® Visa® Credit Card offers a pre-approval process to help determine if you’ll be invited to apply for the card. If pre-approved, you’ll receive an invitation to apply; however, that still does not guarantee approval. Once approved, your credit line can range from $500 up to $10,000, which is much higher than most secured cards.

Best credit cards for fair credit

If you have “fair” credit (those whose FICO scores are between 580 and 669, according to credit bureau Experian), it can be hard to find cards that aren’t laden with high fees. However, there are some options from major banks, including Capital One, that offer reasonable fees and rewards. When used responsibly, these cards can help you improve your credit, so you can qualify for credit cards for good credit.

Capital One® QuicksilverOne® Cash Rewards Credit Card

If you have fair/limited credit and want to earn rewards, the Capital One® QuicksilverOne® Cash Rewards Credit Card is a good choice. Cardholders earn 1.5% cash back on every purchase, every day. There is a $39 annual fee, but you can recoup it if you spend $2,600 a year on the card.

The card comes with a high APR of 26.99% (variable), so this isn’t a card you’ll want to carry a balance on from month to month. Once approved for the card, if you make your first five monthly payments on time, you may be able to obtain access to a higher credit line.

Finally, you can redeem any cash back you earn with the card for any amount at any time.

Capital One® Platinum Credit Card

The Capital One® Platinum Credit Card is a no-frills card for those with fair/limited credit that doesn’t offer any rewards, but does have a $0 annual fee. If you use this card responsibly to build credit, after several months you should see improvements in your credit score and may be able to qualify for no-annual-fee rewards cards. In addition, like the Capital One® QuicksilverOne® Cash Rewards Credit Card, you may be approved for a higher credit limit after making your first five payments on time.

Capital One also has a prequalification tool that narrows down which card offers you may qualify for. Knowing whether you have a good chance of being approved for a card can save you from the hassle of applying and then being rejected.

Best student cards

Building a healthy credit score while still in college is key to setting yourself up for future financial success. If you use a credit card responsibly as a student, you can build a good credit score that will help you down the line when trying to get an auto loan, mortgage, cellphone or apartment lease approval.

Below, we highlight two popular student cards:

Discover it® Student Cash Back

  • 0% intro for 6 Months*

  • Earn 5% cash back at different places each quarter up to the quarterly maximum, when you activate*

  • 12.99% - 21.99% Variable*

Highlights
  • INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.
  • Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Good Grades Rewards: $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years.
  • No annual fee. No late fee on first late payment. No APR change for paying late.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • 0% intro APR on purchases for 6 months, then the standard variable purchase APR of 12.99% - 21.99% applies.
  • See Rates & Fees

See additional details for Discover it® Student Cash Back

More Info

Discover it® Student chrome

  • 0% for 6 months

  • 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. 1% unlimited cash back on all other purchases - automatically

  • 12.99% - 21.99% Variable*

Highlights
  • INTRO OFFER: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year! There’s no minimum spending or maximum rewards. Just a dollar-for-dollar match.
  • Earn 2% cash back at Gas Stations and Restaurants on up to $1,000 in combined purchases each quarter. Plus, earn unlimited 1% cash back on all other purchases – automatically.
  • Good Grades Rewards: $20 statement credit each school year your GPA is 3.0 or higher for up to the next 5 years.
  • No annual fee. No late fee on first late payment. No APR change for paying late.
  • Get 100% U.S. based customer service & get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • Freeze It® on/off switch for your account that prevents new purchases, cash advances & balance transfers in seconds.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • 0% intro APR on purchases for 6 months, then the standard variable purchase APR of 12.99% - 21.99% applies.
  • See Rates & Fees

See additional details for Discover it® Student chrome

More Info

Discover offers two student cards, the Discover it® Student Cash Back and the Discover it® Student chrome. Both cards have $0 annual fees and cashback programs, and offer students the chance to earn a $20 statement credit each school year they maintain a 3.0 or higher GPA for up to five consecutive years.

Here are the cashback programs:

Discover it® Student Cash Back: Earn 5% cash back on everyday purchases at different places each quarter like grocery stores, restaurants, gas stations, select rideshares and online shopping, up to the quarterly maximum when you activate. 1% unlimited cash back on all other purchases - automatically.

Discover it® Student chrome: 2% cash back at gas stations and restaurants on up to $1,000 in combined purchases each quarter. 1% unlimited cash back on all other purchases - automatically.

Not ready for your own card? Become an authorized user

Credit cards have a lot of moving pieces to deal with, from annual fees and interest rates to payment due dates and credit limits. As the primary cardholder, you’re responsible for all this and more. It can be worthwhile, but if you’re not ready to take on the liability for your own credit card, consider asking a family member to add you as an authorized user on their card account.

Becoming an authorized user allows you to piggyback off someone else’s credit, without bearing any responsibility for making payments. Just make sure the account you’re being added to is in good standing, has a low balance and is paid on time all the time.

Once added as an authorized user to the card, the history of that card will appear on your credit reports. While you’re not responsible for paying the bills, your family member is, so if you do use the card (you don’t have to use it to have it appear on your credit reports), repay the primary cardholder for your charges so as not to create any ill will.

Once your credit score has benefited from being an authorized user, you can then apply for a card of your own and then ask to be removed from the authorized user card.

Bottom line

Choosing a starter credit card can seem daunting, but if you answer some important questions that could help narrow down your search, you can find the right card. Whether it’s a secured card, a credit card for fair credit or a student card, there are plenty of options.

If you’re not ready to open your own credit card, you can ask a family member to add you as an authorized user and begin building credit that way. Once you’ve established a fair or good credit score and are comfortable using plastic to pay for purchases, you can open your own card down the road.


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